Bidding is an important part of the overall ad creation process. There are various types of bidding methods available that depend on your overall strategy and objectives.
Figuring out which method is right for you can be a challenge, but it is important to take the time to understand all methods before running a campaign.
This article provides you a basic overview of each method giving you the knowledge you need to start running TikTok Ads.
Currently, TikTok Ads Manager provides 4 different bidding methods:
- Cost per Click (CPC)
- Optimized Cost per Click (oCPC)
- Cost per Mille/Thousand Impressions (CPM)
- Cost per Thousand Views (CPV)
This means your bid is the cost you are willing to pay per click. The system will deliver your ads to users who are most likely to click them at a cost that is as close to your bid as possible.
- Calculation: Total cost / Total click
- Billing Event: Charged by click
- Applicable Advertising Object: Traffic, App Installs, Conversion
This means your bid is the cost you are willing to pay per result. The system will deliver your ads to users who are more likely to take the action you want at a cost that is as close to your bid as possible.
Note: You set your bid for how much you are willing to spend per result (conversion), but your actual billing is based on clicks, not results.
Jon owns a barber shop and wants people to book reservations for a haircut on his website.
He chooses the conversion campaign objective and sets up his bid as oCPC. He just wants to break even for the haircut, so he sets up his bid for each result (reservation) at $15.
As his campaign runs, he starts getting clicks. The system will bid higher for clicks most likely to lead to a reservation and less for clicks that do not.
His total spend of $50 leads to 5 people registering for a haircut on his site. This is an average of $10 per result, which is less than his bid of $15. This is Jon's calculation for finding out the average cost per result.
Jon looks at his bill and sees that he was charged $50. This came from 100 clicks at an average price of $.50. This is Jon’s billing event.
Now if Jon only had 50 clicks. His charge would still be $50 on his bill from 50 clicks at an average price of $1.00 (billing event). Yet, Jon still received 5 reservations from of his $50 spend so he still has an average of $10 per result compared to our bid of $15 (calculation).
- Calculation: Total cost / Total result
- Billing Event: Charged by click
- Applicable Advertising Object: App Installs, Conversion
CPC vs. oCPC
- The billing event for both CPC and oCPC is clicks. The difference lies in the system's optimization target when delivering your ads.
- For CPC, the system optimizes delivery to get more clicks.
- For oCPC, the system optimizes delivery to get more conversions (e.g. App download, purchase on landing page, etc.).
- When creating your ad groups for CPC and oCPC, how you set your bill will be different:
- For CPC, bid for each click.
- For oCPC, bid for each conversion.
This means your bid is the price you are willing to pay for one thousand impressions. The system will deliver your ads to get the most exposure and reach to as many customers as possible within your budget.
- Calculation: (Total cost / Total impressions) * 1,000
- Billing Event: Charged by impression
- Applicable Advertising Object: Reach
This means your bid is the price you are willing to pay for per one thousand 6-second or 2-second video views. The system will deliver your video to get as many views as possible within your budget.
Note: When setting your bid for cost per view in your ad group, make sure that you multiply your desired cost per view by 1000 and enter your total as the bid amount. For example, if I am willing to spend $.05 for a video view, I will enter $50 as my CPV bid ($.05 X 1000 = $50).
- Calculation: Total cost / Total video views * 1000
- Billing Event: Charged by 2-second video views, 6-second video views, or video completion
- Applicable Advertising Object: Video Views
Was this information helpful?